Question 1

Figure 4-16
 
-Refer to Figure 4-16. In this market, equilibrium price and quantity, respectively, are

Accepted Answer

A)   $10 and 30 units.
B)   $10 and 50 units.
C)   $10 and 70 units.
D)   $4 and 50 units.E) B) and D)
F) A) and D)

Question 2

Suppose you make jewelry. If the price of gold falls, then we would expect you to

Accepted Answer

A)   be willing and able to produce less jewelry than before at each possible price.
B)   be willing and able to produce more jewelry than before at each possible price.
C)   face a greater demand for your jewelry.
D)   face a weaker demand for your jewelry.E) All of the above
F) B) and C)

Question 3

Sellers respond to a surplus by cutting their prices.

Accepted Answer

A) True 
 B)False

Question 4

Which of these statements best represents the law of supply?

Accepted Answer

A)   When input prices increase, sellers produce less of the good.
B)   When production technology improves, sellers produce less of the good.
C)   When the price of a good decreases, sellers produce less of the good.
D)   When sellers' supplies of a good increase, the price of the good increases.E) A) and D)
F) B) and C)

Question 5

If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos rises?

Accepted Answer

A)   Both the equilibrium price and quantity would increase.
B)   Both the equilibrium price and quantity would decrease.
C)   The equilibrium price would increase, and the equilibrium quantity would decrease.
D)   The equilibrium price would decrease, and the equilibrium quantity would increase.E) B) and C)
F) A) and B)

Question 6

A decrease in the price of a complement will shift the demand curve for a good to the left.

Accepted Answer

A) True 
 B)False

Question 7

If Max experiences a decrease in his income, then we would expect Max's demand for

Accepted Answer

A)   each good he purchases to remain unchanged.
B)   normal goods to decrease.
C)   luxury goods to increase.
D)   inferior goods to decrease.E) C) and D)
F) A) and C)

Question 8

Figure 4-10
 
-Refer to Figure 4-10. Which of the following would cause the supply curve to shift from Supply B to Supply A in the market for tennis racquets?

Accepted Answer

A)   a decrease in the price of tennis balls
B)   an expectation by firms that the price of tennis racquets will increase in the very near future
C)   a decrease in the price of tennis racquet strings
D)   an improvement in technology that allows firms to use less labor in the production of tennis racquetsE) B) and D)
F) None of the above

Question 9

When quantity supplied exceeds quantity demanded at the current market price, the market has a surplus, and market price will likely rise in the future to eliminate the surplus.

Accepted Answer

A) True 
 B)False

Question 10

A decrease in quantity demanded

Accepted Answer

A)   results in a movement downward and to the right along a demand curve.
B)   results in a movement upward and to the left along a demand curve.
C)   shifts the demand curve to the left.
D)   shifts the demand curve to the right.E) A) and C)
F) All of the above

Question 11

Table 4-9
The demand schedule below pertains to sandwiches demanded per week.
 
-Refer to Table 4-9. Suppose x = 1. Then the slope of the market demand curve is

Accepted Answer

A)   -3.
B)   -1/3.
C)   1/3.
D)   3.E) None of the above
F) A) and B)

Question 12

New oak tables are normal goods. What would happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises, the price of oak wood rises, more buyers enter the market for oak tables, and the price of the glue used in the production of the new oak tables increased?

Accepted Answer

A)   Price will fall, and the effect on quantity is ambiguous.
B)   Price will rise, and the effect on quantity is ambiguous.
C)   Quantity will fall, and the effect on price is ambiguous.
D)   Quantity will rise, and the effect on price is ambiguous.E) A) and C)
F) None of the above

Question 13

Two goods are substitutes when a decrease in the price of one good

Accepted Answer

A)   decreases the demand for the other good.
B)   decreases the quantity demanded of the other good.
C)   increases the demand for the other good.
D)   increases the quantity demanded of the other good.E) B) and D)
F) A) and B)

Question 14

Figure 4-18
 
-Refer to Figure 4-18. At a price of $12, there is a

Accepted Answer

A)   surplus of 1 unit.
B)   surplus of 2 units.
C)   shortage of 1 unit.
D)   shortage of 2 units.E) A) and B)
F) A) and C)

Question 15

Which of the following is the least likely to be a competitive market?

Accepted Answer

A)   ice cream
B)   soybeans
C)   cable television
D)   new housesE) B) and C)
F) A) and C)

Question 16

When the price of a good is higher than the equilibrium price,

Accepted Answer

A)   a shortage will exist.
B)   buyers desire to purchase more than is produced.
C)   sellers desire to produce and sell more than buyers wish to purchase.
D)   quantity demanded exceeds quantity supplied.E) None of the above
F) All of the above

Question 17

Most studies have found that tobacco and marijuana are substitutes rather than complements.

Accepted Answer

A) True 
 B)False

Question 18

A surplus is the same as an excess demand.

Accepted Answer

A) True 
 B)False

Question 19

If a surplus exists in a market, then we know that the actual price is

Accepted Answer

A)   above the equilibrium price, and quantity supplied is greater than quantity demanded.
B)   above the equilibrium price, and quantity demanded is greater than quantity supplied.
C)   below the equilibrium price, and quantity demanded is greater than quantity supplied.
D)   below the equilibrium price, and quantity supplied is greater than quantity demanded.E) A) and D)
F) None of the above

Question 20

Years ago, thousands of country music fans risked their lives by rushing to buy tickets for a Willie Nelson concert at Carnegie Hall. This behavior indicates

Accepted Answer

A)   the ticket price was above the equilibrium price.
B)   the ticket price was below the equilibrium price.
C)   the ticket price was at the equilibrium price.
D)   nothing about the equilibrium price.E) A) and B)
F) B) and D)

Exam 4: The Market Forces of Supply and Demand

A decrease in the price of a complement will shift the demand curve for a good to the left.

Correct Answer
verified

When the price of a good is higher than the equilibrium price,

Correct Answer
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Suppose you make jewelry. If the price of gold falls, then we would expect you to

Correct Answer
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Figure 4-16 -Refer to Figure 4-16. In this market, equilibrium price and quantity, respectively, are

Correct Answer
verified

A decrease in quantity demanded

Correct Answer
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If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos rises?

Correct Answer
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Which of these statements best represents the law of supply?

Correct Answer
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If Max experiences a decrease in his income, then we would expect Max's demand for

Correct Answer
verified

Most studies have found that tobacco and marijuana are substitutes rather than complements.

Correct Answer
verified

Years ago, thousands of country music fans risked their lives by rushing to buy tickets for a Willie Nelson concert at Carnegie Hall. This behavior indicates

Correct Answer
verified

Table 4-9 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-9. Suppose x = 1. Then the slope of the market demand curve is

Correct Answer
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When quantity supplied exceeds quantity demanded at the current market price, the market has a surplus, and market price will likely rise in the future to eliminate the surplus.

Correct Answer
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Which of the following is the least likely to be a competitive market?

Correct Answer
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If a surplus exists in a market, then we know that the actual price is

Correct Answer
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Sellers respond to a surplus by cutting their prices.

Correct Answer
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Figure 4-18 -Refer to Figure 4-18. At a price of $12, there is a

Correct Answer
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Figure 4-10 -Refer to Figure 4-10. Which of the following would cause the supply curve to shift from Supply B to Supply A in the market for tennis racquets?

Correct Answer
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Correct Answer
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A surplus is the same as an excess demand.

Correct Answer
verified

Two goods are substitutes when a decrease in the price of one good

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

A decrease in the price of a complement will shift the demand curve for a good to the left.

Correct AnswerverifiedShow Answer

When the price of a good is higher than the equilibrium price,

Correct AnswerverifiedShow Answer

Suppose you make jewelry. If the price of gold falls, then we would expect you to

Correct AnswerverifiedShow Answer

Figure 4-16 -Refer to Figure 4-16. In this market, equilibrium price and quantity, respectively, are

Correct AnswerverifiedShow Answer

A decrease in quantity demanded

Correct AnswerverifiedShow Answer

If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos rises?

Correct AnswerverifiedShow Answer

Which of these statements best represents the law of supply?

Correct AnswerverifiedShow Answer

If Max experiences a decrease in his income, then we would expect Max's demand for

Correct AnswerverifiedShow Answer

Most studies have found that tobacco and marijuana are substitutes rather than complements.

Correct AnswerverifiedShow Answer

Years ago, thousands of country music fans risked their lives by rushing to buy tickets for a Willie Nelson concert at Carnegie Hall. This behavior indicates

Correct AnswerverifiedShow Answer

Table 4-9 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-9. Suppose x = 1. Then the slope of the market demand curve is

Correct AnswerverifiedShow Answer

When quantity supplied exceeds quantity demanded at the current market price, the market has a surplus, and market price will likely rise in the future to eliminate the surplus.

Correct AnswerverifiedShow Answer

Which of the following is the least likely to be a competitive market?

Correct AnswerverifiedShow Answer

If a surplus exists in a market, then we know that the actual price is

Correct AnswerverifiedShow Answer

Sellers respond to a surplus by cutting their prices.

Correct AnswerverifiedShow Answer

Figure 4-18 -Refer to Figure 4-18. At a price of $12, there is a

Correct AnswerverifiedShow Answer

Figure 4-10 -Refer to Figure 4-10. Which of the following would cause the supply curve to shift from Supply B to Supply A in the market for tennis racquets?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A surplus is the same as an excess demand.

Correct AnswerverifiedShow Answer

Two goods are substitutes when a decrease in the price of one good

Correct AnswerverifiedShow Answer

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